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Refinancing may provide holiday cash

Q: Hoping for some extra money for Christmas gifts this year, I refinanced my mortgage.

My new rate is great. I kept my loan balance low by only cashing out couple thousand dollars. I was hoping to use this couple thousand for gifts.

But at the closing I was told there was no money left for cash-out because of my high tax and insurance escrow deposit. This defeats my purpose for refinancing. Is there anything I can do?

A: You refinanced your mortgage for two reasons: 1.) A better interest rate and 2.) To pull cash out for holiday shopping. At least your long-term goal is met with a lower interest rate. But I certainly understand the need for extra cash around the holidays. You may still get that cash.

Your new lender required money paid upfront to cover your tax and insurance escrow. But don't forget about your old lender. If you escrowed your tax and insurance payments with your old lender, you may receive a refund. Some lenders apply this refund by reducing the payoff amount, but most will mail a check 20 to 30 days after the closing. Hopefully, you are a last-minute Christmas shopper.

Attorney James Haroutunian practices real estate law, estate planning and small business formation in Billerica at 630 Boston Road. Contact him with questions at 978-671-0711 or email him at james@hlawoffice.com.

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